Common loan features

When it comes to selecting your home loan, one size does not fit all. Most loans today come with optional features that may increase the cost of your loan, so make sure you choose a loan with the features and benefits that are right for you.

Your ACA Mortgage Broker has a complete understanding of all loan types and features from our 40+ lender panel. We can recommend the right loan for your particular needs and complete your loan application – stress free.

Here is a guide to a few common home loan features.

100% offset account

A 100% offset account is a bank account linked to your home loan. Any funds deposited into the account can offset the interest calculation against your overall loan, there by reducing the amount of interest you need to pay on your loan.

Extra repayments

Making extra payment on your home loan can allow you to pay off your mortgage sooner and reduce the amount of interest you pay. Some Financial institutions will limit the amount of additional funds that can be credited each year, while other do not offer this feature at all. Find out how much you can save using our free loan extra repayments calculator.

Redraw

If you planning on making regular extra repayments to drive down your loan, then a redraw option will give you the flexibility and security of being able to access additional repayment funds should the need arrive in the future. Check your loan conditions, as some providers may charge a redraw fee and limit the minimum amount you can redraw at any one time.

Loan portability

Loan portability allows you to take your existing loan with you when you sell your existing property and buy new property. This can save on loan exit fees, application fees and mortgage stamp duty, however a number of requirements must be met such as, keeping the existing loan amount and executing the settlement and exchange of both old and new properties on the same day and same time – which can be difficult to co-ordinate.

Repayment frequency

Interest on your loan is calculated daily. The ability to switch from standard monthly repayments to fortnightly or even weekly can save you quite a bit over the life of the loan and help pay the loan off quicker. Repayment flexibility allows you to make payments inline with your income frequency.

Repayment holiday

In times of financial hardship, career change or even maternity leave, the ability to put your mortgage repayment on hold or reduce the repayments for a period may offer some relief. Any interest charged and payment you miss will still need to be paid later, however the interest will be added to you loan balance, which may increase your loan repayments after your loan holiday.

All-in-one loan

An all-in-one loan is where your mortgage, savings and cheque accounts are merged together in one account. These accounts will often have a linked credit card, with an interest free period, where the credit balance is paid off at the end of each month. The advantage of an all-in-one mortgage account is similar to an 100% offset account, where all your salary and other income are deposited into the one account reducing the principal amount of the loan and the amount of interest charged. The privilege of this loan feature generally attracts a higher interest rate and higher loan entry fees.

Salary crediting

If you are not a disciplined saver, salary crediting allows you to deposit your salary directly into the mortgage account; similar to an all-in-one loan account.

Top up

Allows you to use the equity in your property to increase the limit of your existing mortgage without the need to refinance. This then allows you to access your equity for other expenses like a new car, holiday or home renovations.